In August the U.S. Federal Reserve asked a number of big U.S. banks to undergo various "stress tests" in order to judge how their balance sheets could fare in worst-case financial scenarios.
The goal, as reported by CNBC, seems to be to assure that these companies can produce emergency capital given the sudden need.
U.S. banks interviewed by the Fed include Bank of America, JPMorgan Chase, Citigroup, and Morgan Stanley, according to CNBC's sources.
These interviews are a reaction to market volatility and the "too-big-to-fail" mentality.
"The summertime tests were a follow-up to a larger round of balance-sheet assessments that the country's 19 biggest banks undertook as part of the Comprehensive Capital Analysis and Review process that the Fed mandated in March, according to someone familiar with the matter."
Although the specific stress-stress scenarios are unknown, Bank of America "suggested to the Fed that it might introduce a Merrill Lynch tracking stock, among other things, say people familiar with BofA's proposal."
So we're wondering -- which U.S. banks offer relative safety for investors looking to gain exposure to the banking industry?
For ideas we looked toward the trades of banking insiders. If they're using their own cash to buy into the shares of their employers, you better pay close attention.
Do you agree with these bullish insiders? Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Capitol Federal Financial
2. Capstead Mortgage
3. Flagstar Bancorp
4. Sterling Financial
List compiled by Eben Esterhuizen, CFA.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Disclosure: Kapitall's Becca Lipman and Eben Esterhuizen does not own any of the shares mentioned above. Insider data sourced from Fidelity, all other data from Finviz.
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